N.D. oil production hits 1 million barrels per day

WILLISTON, N.D. – North Dakota now produces 1 million barrels of oil per day, joining an elite club that includes Texas, Alberta and 19 countries.

The state saw a nearly 2.5 percent oil production increase in April, bringing North Dakota’s average daily production above the much-anticipated milestone to 1,001,149 barrels.

“We’re in the top 17 percent now, if you look at countries around the world, in terms of crude oil production,” Director of Mineral Resources Lynn Helms said.

Innovation has driven the increases in North Dakota’s oil production, said Sam Gorgen, an analyst with the U.S. Energy Information Administration.

While the state’s drilling rig count has stayed stable at around 190 rigs in recent months, operators have increased production by drilling multiple wells on one pad and other advancements, Gorgen said.

“It’s really been their success in improving efficiency and productivity rather than just raw increases in drilling activity which has helped make it happen,” Gorgen said.

Harold Hamm, CEO of Oklahoma-based Continental Resources, the leading operator in North Dakota, said Tuesday hitting 1 million barrels per day is another “huge milestone” for the Bakken.

“Initially, people didn’t understand the magnitude of what we were doing up there. Now, I think we’re beyond that,” Hamm said. “Most people do realize that it’s a very long lasting resource for America. It’s something that’s going to be with us a very long time, so they’re putting money into infrastructure.”

North Dakota, which produced its first barrel of oil in 1951, was producing about 100,000 barrels per day in 2006, when EOG Resources drilled what is known as the Parshall discovery well, considered by many to have unlocked the Bakken.

Today, with the use of horizontal drilling and hydraulic fracturing technologies, North Dakota is the No. 2 oil-producing state and accounts for about 12 percent of total U.S. oil production, the EIA estimates.

Estimates from North Dakota State University researchers show that 1 million barrels of oil per day contributes $50 million each day to North Dakota’s economy, including more than $11 million in oil and gas production and extraction taxes.

“North Dakota’s oil and gas industry has been a boon to the state’s economy,” said North Dakota Petroleum Council President Ron Ness, adding that drilling is expected to last 14 to 17 more years or longer with technological advancements.

– Alaska, California, Louisiana and Texas are the only states to have ever produced 1 million barrels per day. Today, Texas is the only other state producing more than 1 million barrels per day, other than North Dakota, and is approaching 3 million barrels per day.

– The Bakken is one of 10 basins ever to have surpassed 1 million barrels per day.

– One million barrels of oil could fuel 48,272 cars with gasoline.

Helms, who released the preliminary numbers Tuesday, said he anticipates North Dakota oil production will continue growing through the end of 2017, when it will plateau around 1.5 million barrels per day.

Hamm projects North Dakota will peak at 2 million barrels per day in 2020.

John Harju, associate director for research for the Energy and Environmental Research Center at the University of North Dakota, estimates that current technology is recovering between 4 percent and 6 percent of North Dakota’s oil.

“Big fields get bigger. This is a really big field and we’re still growing,” Harju said. “We just keep getting better and better wells.

Theodora Bird Bear, chairwoman of the oil and gas task force for the Dakota Resource Council, a conservation group, said the state is not adequately addressing the impacts of increased oil development on the environment or rapidly growing communities. Law enforcement challenges, crowded schools and spills related to oil development are among the impacts that need more attention, she said.

“They’re not measuring the full scale of impacts that are happening in western North Dakota,” said Bird Bear, who lives in rural Mandaree.

Gas also sets record

North Dakota also produced an all-time high of 1.1 billion cubic feet per day of natural gas in April, also based on preliminary figures.

Natural gas flaring decreased from 33 percent to 30 percent in April. Helms said he expected the flaring percentage to be even lower with the Hess Corp. Tioga Gas Plant expansion coming online. He said the expansion was not operating at full capacity until the end of the month and he expects to see more improvements when May figures are released.

The total volume of natural gas flared was 10.3 billion cubic feet, the lowest volume since November 2013, Helms said. In March, the state flared a total volume of 11.4 billion cubic feet, Helms said.

In April, 63 percent of North Dakota’s crude oil was transported by rail, down from 66 percent the previous month, said Justin Kringstad, director of the North Dakota Pipeline Authority.

The total volume of crude oil transported by rail out of the Williston Basin remained about the same at 700,000 to 715,000 barrels per day, Kringstad said.

Celebration

The North Dakota Petroleum Council is holding a free public event called “One Million Barrels – One Million Thanks” from 11 a.m. to 3 p.m. June 25 in Tioga. It includes a barbecue, aerial tours, of the area, an airshow by the Texas Flying Legends and tours of the Clarence Iverson No. 1 well. For more information about the event, visit www.ndoil.org/events.

Timeline:

April 1951: First barrel of oil produced in North Dakota

1952: First Bakken well begins producing

1984: North Dakota oil production peaked during the state’s second oil boom at an average of 143,883 barrels per day

1987: Meridian Oil drills first horizontal Bakken well

October 1989: North Dakota produces 1 billionth barrel of oil

April 2006: EOG Resources drills the Parshall discovery well, considered by many to be the well that unlocked the Bakken

March 2012: North Dakota becomes third top oil-producing state, based on January production number of 546,318 barrels of oil per day

May 2012: North Dakota passes Alaska to become the second highest oil-producing state, trailing only Texas, based on March production numbers. That month, North Dakota produced 639,277 barrels per day

2013: North Dakota oil production accounted for more than 11.5 percent of total U.S. crude oil production

June 2014: North Dakota hits milestone of producing 1 million barrels of oil per day, based on April production numbers. The state averaged 1,001,149* barrels per day during the month

By the numbers:

1,001,149* barrels of oil per day produced in April

The state has 10,658* producing oil and gas wells

94% of oil produced comes from Bakken and Three Forks wells

1.1* billion cubic feet per day natural gas produced in April

30 percent natural gas flared in April

North Dakota is projected to have 40,000 to 70,000 total wells

North Dakota is estimated to add 2,000 wells per year

Sources: North Dakota Department of Mineral Resources and U.S. Energy Information Administration

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